Changes to the Nestlé pension scheme that could mean that 7,600 workers losing thousands of pounds in retirement income should be put ‘on hold’ until a proper valuation of the scheme in December.
Unite, the country’s largest union, and the GMB union are ‘totally opposed’ to Nestlé’s plans to close the defined benefit scheme, currently offered on a career average basis, and replace it with a defined contribution or ‘money purchase’ scheme.
In a letter to the company, Unite national officer for the food and drink sector Julia Long and the GMB national officer for the manufacturing sector Stuart Fegan said that the unions were not engaging in the consultation process as it is ‘a fait accompli on introducing these detrimental changes’.
The two unions are calling for the consultation process to be suspended ‘in favour of constructive negotiations’.
The letter continues: “We are aware that an actuarial valuation of the scheme is due to take place in December 2015 which would, in our view, provide us a more informed position on the health of the scheme and be the logical point to discuss what actions may be required from all stakeholders to maintain the sustainability of it.
“In this sense we believe Nestle is acting in a precipitous manner.”
The unions argue that Nestlé can well afford to maintain the present defined benefit pension scheme, as it is making increasing profits in the UK and in international markets, and can’t blame the long period of low interest rates and low gilt returns for the proposed changes.
The letter adds: “The company has placed the sole part of its case on the current economic position rather than sufficiently evaluating what Nestle could lose by making these changes to the scheme in terms of retaining a skilled workforce within the business and the employee engagement that the defined benefit scheme contributes to Nestle.”
Earlier this month, the unions accused the company of an ‘act of betrayal’ as the proposals backtrack on pension changes introduced five years ago which saw the final salary pension scheme scrapped for a career average scheme on the understanding that it would be an industry leading scheme. A ‘money purchase’ scheme was also introduced at the time.
If the current proposals go ahead the career average scheme will be closed to new entrants from 2016 and closed to future pension build up for existing members from the start of 2017.
Unions say that the changes will affect workers making Nestlé products across the UK ranging from pet food and bottled water to confectionary and breakfast cereals.
The full letter can be accessed via this link: http://www.unitetheunion.org/uploaded/documents/000151pensionconsultationNestle11-23512.pdf
Notes to editors:
For more information please contact Unite senior communications officer Shaun Noble in the Unite press office on 020 3371 2060 or 07768 693940.
And/or GMB national officer Stuart Fegan on 020 7391 6762 or 07912 890434 or GMB press office 07921 289880
- Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.